Plunging Australian Jobs Send Japan Equities... Soaring

Earlier today we showed that even the big banks are officially throwing in the towel on the "artificial market" when Deutsche's Jim Reid summarized the complete insanity of Bernanke's (because it still is his) centrally-planned new normal as follows. "So far this year markets have gone down on good data, gone up on good data, gone down on concerns over weaker data and also gone up on weaker data." Now we can add yet another item to the list of explanations that will send futures higher: a plunge in Australian job numbers. Moments ago, Australia reported that in December employment fell by a jarring 22,600 jobs on expectations of a 10,000 gain, driven by a 31,600 plunge in full-time jobs offset by an increase in 9,000 part-time jobs (do they have Obamacare in Australia too?).

Well, as one can assume the immediate reaction in the Aussia dollar (AUD) was not good, as this latest data increased the odds of an RBA rate cut, and confirmed that the Chinese economic slowdown is indeed having major spillover effects on derivative economies. And sure enough, the AUDUSD tumbled by nearly 100 pips to 0.8825 from levels earlier in the session.

That much was expoected. What made zero sense was the offsetting reaction in the completely unrelated USDJPY pair. Because while the news for Australia was declidedly negative, somehow the offsetting reaction to some algo somewhere, was to send the USDJPY soaring.

And since as everyone knows, equity markets are now nothing but a derivative of the Yen-carry trade, the Nikkei (green line in chart above), promptly exploded higher. Whether this is on the expectation that the Bank of Japan will somehow print more Yen because jobs in Australia are cratering, or "just because" nobody knows. And frankly nobody cares. Point being: we are once again back to the old regime where good news is great for stocks, but bad news is better.

Finally, since the US algo army will shortly pick up the baton from Japan in a few hours, look for the S&P futures to soar to new record highs on, what else, a crashing and burning Australian economy.

The post detailed how Avestra asset management was involved in the "Formosa auto trade" scam a few years back. Flyers were handed out selling magical laptops with auto-trading software that yielded profits of hundreds of percent, if only you stumped up 30 grand up front. More recently Avestra gained control of AG Financial (AHA.AX) and engaged in a circular investment scam to embezzle the pension funds managed by the company.

When I came to Australia a few years ago I was startled by the number of conmen in the business community. I mean, it is a line that is often blurred, but at least in other parts of the world they seem to maintain the appearance of respectability. But in Oz it's all in the open, and you have cats involved in the ABC Learning Centres getting the Medal of The Order Of Australia.

And What happened to Emmanuel Cassimatis of Storm Financial? It's a disgrace.

Those truck drivers making $165k/year better have saved for a rainy day, me thinks. I suspect the Australian heart surgeons [whom ZH reported make considerably less] will still have a job as well as strong demand as obesity and triple bypass sugery needs soar.

Sorry, they prefer to spend their money on big houses, big boats, big holidays, flash cars (as many as can fit into their 5-garage McMansions with waterfront views), and of course big (expensive) holidays.

Welcome to the land of "I've got Rights, Mate" mentality - everyone knows "their rights", everyone forgets that these rights come with attendant responsibilities (such as planning for YOUR Future!)

Add in a good dose of Union-driven protectionism (only a "Licenced Tradesman" is legally able to do many simple things), and you've got a good recipe for a very corrupt little Country. Why do you think Mitsubishi, Ford and now GM are calling it a day and ceasing car production in Australia - I'll give you a clue - it's not because the workforce are motivated, honest and hard working (although us Aussies do like to project that particular fiction).

As an aussie stupid enough to get into mortgage debt, this is good news! But even better news will be when the entire world economy freezes and there's a global reset. I plan on being raptured to heaven at around the point when this historical event comes to pass. :)

The biggest scam...Re-inflating a housing market bubble while a mining boom crashes. Pure genius that one.

Australia, Canada and New Zealand (yes them too, even with their milk export lead recovery lol) are all in deep trouble. Especially Australia. Get ready for Fed liquidity swap lines and bailouts ala Aussie soon...mind you Yelland is concerned about that USD, could collapse any-day

This is not that difficult. Central planners have been and will continue to use the market as a mechanism to combat the structural decline of the developed world. Everytime these numbers deteriorate expect that much more of a ramp in the markets.

Australia is also recovering from several years of Labour government that took the national debt from $0.00 to 200 billion, then had the audacity to reject the Liberals moves to raise the debt ceiling when they came to power. The same Labour government also rejected the previous Liberal governments Narau solution to illegal immigrants only to scrap it, resulting in a mass influx of illegal immigrants further resulting in Labour panicking and instituting a Papua New Guinea solution. Labour touted their Papua New Guinea solution as a regional solution, how Narau wasn't is beyond me. The same labour government promoted it's leader Kevin Rudd who won a landslide election swing to Labour to only sack him a couple of years later and replace him with Juila Gillard who they then sacked a couple of years later and replaced with someone else who lost then lost the election - surprise, surprise. In the end Labour provided a better opposition to Labour than Liberal.

Will this ever end. Will reality ever be center stage again. And today, even a subscription site that I belong to decided to join the fray and buy Spoos and QQQs. This after months and months of advising bubble, currency war, Fed insanity and on and on. They advise " we might as well ride this up with everyone else". He is sure we can be the first ones out the door and in a seat when the music stops. Now I have heard it all.

The train has left the tracks already. The locomotive just hasn't hit enough shit to stop moving yet. When it stops, bankers will be knocking over women and children to be the first off. And they will sell at the speed of light into a vacant market. The banks are not hoarding cash for nothing.

It's all stacked up against the coming wave of loan defaults... And because it's a certainty that the pendulum will swing past any equlibrium point (though what that is is starting to become nearly impossible to state) as the loan failures pile up and off-books shit starts seeing the light of day.

In the end it'll only have bought a bit of time. The conclusion will be the same: total collapse/failure.

Well, if job losses in Canada, Austraila and slowdown in US is due to China in some direct or "indirect way inclusive of Obamacare (in US too), maybe there's something "real" going on that only Old Yellen might only be able to FIX,with MOAR USD printing. Watch out for the bull trap in the US Dollar!

Is "insanity" sustainable? If it were sustainable, why would anyone invests logically? Prudent is out of fashion, money manager is so yesteryear, a crazy monkey throwing darts would likely have a better performance than most of us.

As an Aussie Oil n Gas worker I am amazed at how stupid Government of our Country is. A lot of recruitment is going on here but not many of the good paying jobs are going to Aussies. There are not enough experienced workers around. Most of the new emeployees are from overseas. So the good pay is going to leave these shores to other countries. Result...a lot of bullshit about how the boom is good for our economy.

Govts AND industry are both stupid. That is, in regards to being able to see that their futures are pretty much gone.

Those "good paying" jobs are only short-term, as eventually exports will collapse. And, given that all is structured for growth, when economies of scale in reverse hit it'll wipe out margins and force MANY industries to fold up.

"So the good pay is going to leave these shores to other countries. Result...a lot of bullshit about how the boom is good for our economy."

How do you think things work, really? Exports have always been key. If you don't have folks outside of your country making sufficient incomes to purchase your exports then there's really no way, whether it's the locals making the money or not, that an export-based industry is going to continue.

With China's growth winding down their energy imports are, eventually, going to decline. The "overseas employees" really have but a small impact in the Big Picture: but it's a handy scapegoat.

The reason why foreign companies such as the auto companies have plants in a given country is due to various trade rules that reduce competition with local companies*. Ultimately, however, it's about whether or not the local populace presents a viable market; and, on this basis I'd have to say that this is more of an indicator of a looming downturn down-under...

* Yes, there are other issues such as cost of available energy and other resources (shipping too [closer launching point to other markets]), as well as environmental constraints (higher profits to be had if you can freely trash the environment).

Things on this particular front have gone surprisingly quiet, but it is of relevance that the next "Holden Commodore" may well be the same car as is marketed as a Buick in China - and will be made in the same Chinese plant, but with a Holden grille badge.

I'll say one thing. The usd/jpy has not retraced on the hourly chart for over 48 hours, and the trade is extremely overbought. If I was long I would start taking some profit before those jobs numbers roll in. If it sells off all those stops on the way up are going to get blown out in epic fashion.

I would say some additional taper is now mostly priced in so the risk is to the downside.